This item highlights awareness of the aspects of the VAT system that apply directly to overseas businesses so that they can seek professional advice at the correct time, thereby avoiding noncompliance and unexpected costs.
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International Tax
Adapting to the United Kingdom’s New Remittance Basis Rules
There have recently been some radical changes in the taxation of certain taxpayers in the United Kingdom.
New Expatriation Tax Rules Enacted
Legislation imposes a mark-to-market regime for taxing gains of U.S. citizens and long-term U.S. permanent residents who expatriate (Sec. 877A(a)).
Who Is a Manufacturer Under the Proposed Contract Manufacturing Regs.?
In February 2008, the IRS issued proposed regulations intended to clarify the manufacturing exception in the context of foreign base company sales income (FBCSI) under Sec. 954(d)(1).
When Do Foreign Currency Forward Contracts Constitute Sec. 1256 Contracts?
For certain foreign currency derivatives, such as a foreign currency forward contract, Sec. 1256 provides special timing rules. Whether those rules under Sec. 1256 apply to a foreign currency derivative depends on the definition of “foreign currency contract.”
When Is a Foreign Entity Relevant for U.S. Entity Classification Purposes?
A company organized under the laws of a foreign country that does not conduct business in the United States still may be “relevant” for purposes of U.S. taxation. Therefore, it may be necessary to select a federal tax classification to minimize U.S. tax.
Tools for Tax Planning for Foreign Nationals
The AICPA’s Foreign National Task Force has developed tools to help practitioners deal with issues that arise when preparing Form 1040NR for a foreign national.
Foreign Bank and Financial Account Information Reporting Deadline Near
Tax practitioners with clients with foreign bank accounts may want to consider sending a mailing soon to notify clients of their responsibility to file the Report of Foreign Bank and Financial Accounts.
Foreign Tax Credits: Reducing Eight Categories to Two
The American Jobs Creation Act reduced the foreign tax credit limitation categories from eight to two: passive category income and general category income.
Form 1042 Information Reporting Requirements
Taxpayers have an obligation to file information reporting forms to report certain payments to nonresident individuals, foreign corporations, foreign partnerships, and certain foreign fiduciaries, estates, and trusts.
CPM: The World’s Transfer Pricing Method
The comparable profits method has emerged as the dominant transfer pricing method among multinational companies today due to its widespread acceptance by taxing authorities around the world, its administrative ease of use, and, often, opportunities for tax rate reduction.
Tax Court Holds—Repeatedly—That Antarctica Is Not a Foreign Country
In 2007, the Tax Court in case after case decided that taxpayers cannot exclude income earned while in Antarctica under the foreign earned income exclusion provisions of Sec. 911.
Revisions to 2007 Form 1120-F
The IRS has revised Form 1120-F, U.S. Income Tax Return of a Foreign Corporation, and related schedules, effective for filing periods ending on or after December 31, 2007.
Commentary on the Canada-U.S. Tax Treaty’s Fifth Protocol
The U.S. Secretary of the Treasury and the Canadian Minister of Finance signed an important tax agreement (the Fifth Protocol) updating certain provisions of the Canada-U.S. Tax Treaty.
IRS to Perform Mandatory Audits of Foreign Earnings Repatriation
The IRS LMSB Division has identified foreign earnings repatriation as a Tier I compliance issue, making it a mandatory examination item for those U.S. taxpayers selected for audit that have elected to repatriate foreign earnings under Sec. 965.
IRS Announces Program to Share Employment Tax Exam Results with States
The IRS and 29 state workforce agencies jointly announced that they have entered into agreements to share with each other the results of employment tax examinations.
Global Harmonization of Taxation
The European Union (EU) was a catalyst for the acceptance of international financial reporting standards (IFRS) in Europe. The EU and the International Organization of Securities Commissions (IOSCO) adopted IFRS in 2002, the U.S. Securities and Exchange Commission (SEC) anticipates IFRS acceptance by 2009, and the Financial Accounting Standards Board
Foreign Earned Income Exclusion Housing Cost Limitations Increase
In Notice 2007-77, the IRS has adjusted the 2007 limitation on housing expenses under Sec. 911 for specific locations in countries with high housing costs relative to U.S. housing costs. The adjusted housing expense limitations are to be used in determining the housing cost amount eligible for exclusion or deduction
2008 Tax Rate Changes in China
Editor: Michael D. Koppel, CPA, PFS The Enterprise Income Tax Law (EITL) will become effective in China on January 1, 2008. It was approved at the 10th National People’s Congress of China, which concluded on March 16, 2007. The function of the EITL is to streamline the new tax rates
Notice 2007-13: Loosening the Rules Surrounding Substantial Assistance
Editor: Kevin F. Reilly, J.D., CPA The global marketplace has undergone a dramatic transformation since the regulations governing foreign base company services income were issued in 1968. As this change continues, the IRS must give serious consideration to the relevance of existing statutes that originated when American commerce was far
PRACTICE MANAGEMENT
2026 tax software survey
CPAs rate their return preparation software’s performance during this year’s tax season.
